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U.S. Taxpayer Money: Making Dictators Rich And Perpetuating Instability For More Than

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Unread 03.26.13, 11:57 PM
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U.S. Taxpayer Money: Making Dictators Rich And Perpetuating Instability For More Than

03.26.13 09:01 PM

Senator Rand Paul (R-Ky.) has been making waves in the GOP in recent months as he tries to push a more libertarian philosophy in the party. But old guard neocons like hawkish Senators John McCain (R-Ariz.) and Lindsey Graham (R-S.C.) are hell-bent on ensuring that Paul and his legislative allies do not affect Congress’ beloved military-industrial complex — even if it means allowing American infrastructure to deteriorate as the Nation pumps billions of dollars overseas.

Last week, during the Senate budget “vote-a-rama,” Paul and Senator Ted Cruz (R-Texas) offered amendments that would have reduced the amount of U.S. foreign aid and freed up funding for other projects. Paul’s effort would have allocated $16 billion for repair and replacement of structurally deficient bridges and other domestic infrastructure projects through cuts to Energy Department loan guarantees and foreign aid spending.

Every Democrat present voted against the Paul amendment, as did 19 Republican Senators including McCain, Graham and Kelly Ayote (R-N.H.). A similar scenario played out with regard to an amendment proposed by Cruz that would have reduced foreign assistance to Egypt in order to provide a missile defense system on the eastern seaboard of the United States.

For their efforts, which the Senators must have known were damned from the get-go in a Congress that believes spending more is saving, “wacko birds” like Paul and Cruz were blasted with a familiar neocon criticism: Spending less on foreign aid is isolationist foreign policy that will embolden international terrorists.

McCain suggested that Republican disagreement over the appropriate amount of foreign aid is a decades-old argument exacerbated by tough economic times.

“That fight has been going on since prior to World War II,” McCain said. “It’s always been there, and it always will be. It’s exasperated and exaggerated by bad economic times.”

He added, “We’ve always had this struggle within the Republican Party going back to post-World War I when the Republicans — isolationists kept us from joining the League of Nations. The isolationists prior to World War II, which meant we were not ready — the anti-military after Vietnam … where we had a hollow army.”

McCain is right to suggest that for more than 70 years the United States has been engaged in providing big-money aid to foreign countries to the dismay of America’s fiscal conservatives. What the Senator failed to note, however, is that those on his spend-happy side of the debate have almost always won and that U.S. foreign aid has almost always been historically judged by its intentions rather than results.

Prior to WWII, American benevolence was mostly provided to foreign countries via private donors in the United States. That changed with the introduction of the Marshall Plan (officially known at the European Recovery Program), which poured more than $13 billion into Europe to help the war-torn continent rebuild. Most analysts agree that Europe would have recovered without U.S. aid, but the aid helped strengthen top-down government structures that were more willing to bend to the will of U.S. wishes.

The apparent success of the European welfare plan led then-President Harry Truman’s 1949 proposal of the Point Four Program to provide a smaller version of the Marshall Plan for poor countries in Africa, Asia, and Central and South America.

Thus, the floodgate was opened.

In the years since, the United States has provided aid to countries all over the world in the form of food assistance, economic development and even general budget support. Over the same period of time, Congress has noted and attempted to reform terrible failures in the foreign aid system that have rendered funds provided to countries ineffectual or, worse, harmful.

Despite being ineffective and a waste of American taxpayer dollars in most cases, there are some reasons why foreign aid remains sacrosanct to Democrats and some Republicans. Democrats, who pride themselves of being a sort of party of compassion, relish the idea of helping hungry children the world over and providing for the needs of the world’s poorest people. And Republicans like McCain, for their part, often see a strategic national security benefit to buying friends in certain parts of the world.

Unfortunately, Congress and financial accountability are almost completely mutually exclusive. And when it comes to foreign aid dollars that are pushed through a system of bureaucratic chutes and ladders in the U.S. and abroad, accountability is impossible.

Setting utopian goals for how foreign aid money is to be spent makes everyone feel warm and fuzzy, but the reality remains that the appropriated dollars are often reduced to pennies when they finally come to be used for the purpose for which they were intended.

If you think foreign aid is a boon to the world’s poor, consider the path a dollar must take before it reaches its final resting place in the country to which it was given as outlined by economist Peter Bauer.
First, it must be allocated by the donor country’s government. That government has its national political, military, and economic objectives, such as supporting friendly states, selling its food and weapons, promoting its own consultants, intervening in international conflicts, and so on. Traditionally, much of bilateral foreign aid has been tied to purchases from donor countries, although apparently this phenomenon has seen some decline (Easterly 2009).

Money provided by the United States for the purpose of foreign aid passes through many hands before it reaches its final resting place, and this often takes place in notoriously corrupt countries. In fact, a recent report produced by Transparency International illustrated that some countries receiving handsome sums of U.S. foreign aid also have the highest instances of perceived corruption. They include (listed from most to least corrupt): Afghanistan, $8 billion in foreign aid; Iraq, $1.7 billion in foreign aid; Yemen, $64 million in foreign aid; Pakistan, $2.1 billion in foreign aid; Lebanon, $232 million in foreign aid; Egypt, $1.6 billion in foreign aid; and others. For foreign aid to work as intended in these places, one must assume that government officials of foreign nations are dedicated to the welfare of their people — a tough sell for Americans who aren’t even sure their politicians are.

In addition to the propensity of corrupt governments to skim off the top of foreign aid money, another problem with U.S. foreign aid policy exists: Lawmakers are either too lazy or too heavily lobbied to re-evaluate the purpose of foreign aid when its effectiveness of use comes into question.

One good example of this is the foreign aid money still being pumped into Israel and Egypt as a result of an agreement reached during the Camp David peace accords in 1978. In return for not blowing one another off the face of the Earth, the United States offered billions of annual dollars to both countries for development.

Today, Egypt remains impoverished, corrupt and largely in the control of Muslim extremists. And Israel has used the aid money to finance the Israeli invasion of Lebanon, to implement wage and price controls, to provide subsidies for inefficient government companies and to put into place a make-work full-employment program custom-made to reduce productivity throughout the 1980s, nearly killing its economy. In essence, Israel has used the money in many of the same ways bureaucrats in the U.S. waste taxpayer dollars.

Unfortunately, many Americans continue to believe that the United States has some celestially ordained obligation to continue providing upward of $3 billion in annual aid to Israel. That, combined with the unrelenting Jewish lobbying efforts aimed at members of Congress, protects the Israeli honeypot, even as the U.S. faces economic demise of its own.

If the real goal of American foreign aid policy is, in fact, to protect allies such as Israel in harsh regions of the world, providing less monetary foreign aid makes perfect sense. This holds true because the billions of dollars provided by the United States to protect Israel are being negated as foreign aid money pumped into other, far less friendly nations in the Mideast are being used to fund an arms race.

In fact, as has been noted by Paul, the U.S. gives more aid to Israel’s neighbors than to Israel in the form of monetary aid and reduced-price armaments. So if the U.S. provides Egypt with 20 F-16 fighter planes, Israel turns around and — likely using foreign aid funds — purchases 25.

In fairness, despite the fact that foreign aid is being stolen by corrupt government officials the world over and creating arms races in destabilized regions, the money has done some historical good by way of eliminating disease in some parts of the world. Supporters point to those small victories and advocate for continued foreign aid spending at current levels (more than $56 billion annually), arguing that the money only accounts for about 1 percent of the U.S. budget. But should it not be duly noted that the $85 billion sequester that the Nation’s lawmakers — both socially liberal Democrats and military-industrial-loving Republicans — just finished wetting themselves over represents a similarly miniscule portion of the budget?

If isolationism means re-evaluating foreign aid expenditures for effectiveness, any Senator calling himself a fiscal conservative should relish in being branded as such by the likes of the McCain and his neocon and Democratic acolytes.

Though President Ronald Reagan was no reformer of foreign aid, he did give the idea lip service in 1981, saying, “Unless a nation puts its own financial and economic house in order, no amount of aid will produce progress.”

With $16 trillion in debt and budget crisis on top of crises, it’s past time to heed those words.

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